It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were going downhill after the FTX crash made them look even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting crypto as a form of payment, this will make it easier for people to hold and use crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long run Being patient and disciplined is essential.